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Zhang, Shulian, Bamford, David, Moxham, Claire and Dehe, Benjamin

Performance Measurement Systems and Strategic Management within UK Healthcare

Original Citation

Zhang, Shulian, Bamford, David, Moxham, Claire and Dehe, Benjamin (2011) Performance Measurement Systems and Strategic Management within UK Healthcare. In: 22nd Annual Production and Operations Management Society (POMS) Conference 2011, April 29th­May 2nd 2011, Reno, Nevada, USA. 

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POMS Abstract number: 020-0245

Title: “Performance Measurement Systems and Strategic Management within

UK Healthcare”

Author Information:

Names

Shulian Zhang David Bamford

*corresponding author

Claire Moxham Ben Dehe

Affiliation Manchester

Business School

Manchester Business

School

Manchester Business

School

Manchester Business

School

Address Booth Street West

Manchester

M15 6PB

Booth Street West

Manchester

M15 6PB

Booth Street West

Manchester

M15 6PB

Booth Street West

Manchester

M15 6PB

Tel 0161 306 8982 0161 306 8982 0161 200 3495 0161 306 8982

Email Shulian

Zhang@mbs.ac.uk

David.Bamford@mbs.ac.uk Claire.Moxham@mbs.ac.uk Benjamin.Dehe@mbs.ac.uk

POMS 22nd Annual Conference

Reno, Nevada, U.S.A.

April 29 to May 2, 2011

Performance Measurement Systems and Strategic Management within UK

Healthcare

Abstract:

April 2009 was an important period for all National Health Service (NHS)

Community Health Services (CHS) organisations as they were formally separated

from the commissioning service in the Primary Care Trust (PCT). This had many

implications, including the need to establish individual board, develop independent

strategy, and set-up autonomous governance. The host organisation was keen to

investigate the effectiveness of the current strategy deployment process and

subsequently identify areas for improvement.

Our investigation looked into adapting strategy deployment systems such as the

Closed-Loop Management Systems (Kaplan and Norton 2008) at NHS CHS

organisations which can facilitate organisational needs in the area of strategy

deployment. As human capital with the suitable skills is required for any successful

implementation of a management system, the researchers expanded the scope by

including an assessment of the organisation’s readiness for adapting formal strategy

deployment systems in terms of management skills levels.

Keywords: capacity measurement, healthcare, UK NHS

Introduction

Since the introduction of the Balanced Scorecard in 1992 by Kaplan and Norton, the

Balanced Scorecard has been successfully applied in government and non-profit

organisations, including several health care providers. As a performance

measurement system, Balanced Scorecard is no longer a new management tool for us.

However, the publication by Kaplan and Norton - The Execution Premium (2008)

revealed Performance Measurement Systems such as Balanced Scorecard are no

longer the only method to measure performance, but part of Closed-Loop

Management system that ensure successful strategy execution by linking strategy to

performance measurement systems and operations (Kaplan and Norton 2008). This

strategy deployment system guided large corporations such as the Bank of Tokyo,

HSBC Rail, Lockheed Martin, and Marriott Vacation Club International to

effectively translate strategy into specific operational targets, so employees can link

their daily inputs to organisation’s strategic objectives. (Kaplan and Norton 2008)

In June 2009, the first author of this paper was appointed as a Strategic Project

Manager in one UK National Health Service (NHS) Community Health Services

(CHS) organisation to evaluate and facilitate strategy deployment within the

organisation. April 2009 was an important period for all NHS CHS organisations, as

they were formal split from commissioning service in the Primary Care Trust (PCT).

This has many implications on CHS organisations, including the need to establish

individual board, develop independent strategy, and set up autonomous governance.

The research host organisation was keen to investigate the effectiveness of current

strategy deployment process and subsequently identify areas for improvements.

This research investigates how adapting strategy deployment systems such as The

Closed-Loop Management Systems at NHS CHS organisations can facilitate the

organisation’s needs in the area of strategy deployment. The necessary human capital

is required for successful implementation of any management systems. Therefore, the

research scope also included an assessment of the origination’s readiness for adapting

formal strategy deployment systems in terms of management skills level.

This paper first reviews the available literature then outlines the research

methodology used. We then present the findings and engage in discussion before

presenting our conclusions and recommendations.

The Literature

Scholars, including Mintzberg, Quinn and Ghoshal recognise that strategy is reviewed

differently depending on whether it belongs to the manufacturing sector or the service

sector (Mintzberg et al. 1998). Quinn defines strategy as the blueprint to link an

organisation’s goals, governance and actions together (Quinn 1980). See Diagram 1

Strategy requires a number

of definitions including five

Ps. (Mintzberg, Ahlstrand et

al. 2009)

“Strategy is a pattern,

that is consistency in

behaviour over time.”

(Mintzberg, Ahlstrand et

al. 2009, P9)

“Strategy is a position,

namely the location of

particular products in

particular markets.”

(Mintzberg, Ahlstrand

et al. 2009, P13)

“Strategy is a

perspective, namely

an organisation’s

fundamental way of

doing things”

(Mintzberg, Ahlstrand

et al. 2009, P13)

“Strategy is a policy, that

is, a specific manoeuvre

intended to outwit an

opponent or competitor”

(Mintzberg, Ahlstrand et

al. 2009, P15)“Strategy is a plan, or

something equivalent-a

direction, a guide or

course of action into

the future, a path to get

from here to there.”

(Mintzberg, Ahlstrand

et al. 2009, P15)

Diagram 1 Strategy as 5Ps – developed by the researcher based on the definition by Mintzberg,

Ahlstrand et al. (Mintzberg, Ahlstrand et al. 2009)

Service organisations have to tackle the fact the services cannot be measured as easily

as the outputs from manufacturing organisations. This is mainly because services are

variable depending on the customer who receives them or the person who delivers

them (Harmon et al. 2006). This intangible feature of services makes it even more

complicated to measure (Johnson & Scholes. 2008).

Johnson and Scholes emphasise that strategy and strategic management is an

important issue in industry as well as in public sectors (Johnson & Scholes. 2008).

The difference is that public organisations usually have a large number of direct and

indirect external stakeholders to satisfy, particularly from the government (Johnson &

Scholes. 2008).

Two unique characteristics of the UK health care sector are near a monopoly of

provision and funding sourced from taxation. These impose some restrictions on its

strategic options, for example, they might not be able to choose to be specialised as

they are obliged to provide a wide range of services (Laing and Shiroyama 1995;

Johnson, Scholes et al. 2008).

Warnock and Grant remark that the ultimate purpose of an organisation’s existence is

to create value for its shareholders. The objective of strategy is to transform multiple

inputs and options to achieve an organisation’s strategic goals and objectives

(Warnock 2000; Grant 2008).

Kaplan and Norton reinforce the importance of strategy by stating that process

improvement can reduce costs and improve quality by delivering operational

excellence. However, the improvement results are unlikely to be retained without a

robust strategy to provide the organisation with an inspirational vision and direction

(Kaplan and Norton 2008c).

The 2009 Management Tools and Trends Survey conducted by Brain & Company

reveals that Strategic Planning remains as one of the most popular management tools

even during today’s economic downturns when many large organisations focus on

cost cutting (See Table 1).

Usage

1 Benchmarking 76%

2 Strategic Planning 67%

3 Mission and Vision Statements 65%

4 Customer Relationship Management 63%

5 Outsourcing 63%

6 Balanced Scorecard 53%

7 Customer Segmentation 53%

8 Business Process Reengineering 50%

9 Core Competencies 48%

10 Mergers & Acquisitions 46%

Top 10 management tools 2009

Table 1: Top 10 management tools 2009 – source: 2009 Management Tools and Trends Survey by

Brain & Company (Rigby and Bilodeau 2009, P3)

However, there are some reservations about strategy deployment systems. Kare-Silver

remarks that managers are not satisfied with current available tools and always prefer

tailored tools for their specific needs (Kare-Silver 1997). Knott continues with this

argument by stating that strategy tools can only be used as a direction for management

decision making and cannot provide a systematic roadmap (Knott 2008).

The importance of performance measurement has been a key topic in both industry

and academic research areas. Eccles correctly states “what gets measured gets

attention, particularly when rewards are tied to the measures” (Eccles 1991, P131),

while Kaplan reiterates the importance of performance measurement by stating “what

you measure is what you get” (Kaplan and Norton 1992, P71). Mintzberg supports

these remarks by indicating that performance framework can assist an organisation in

translating high level strategies into measurable targets, therefore enabling employees

to align their daily activities with corporate strategy (Mintzberg, Quinn et al. 1998) .

As is illustrated in Diagram 2, a survey of 113 worldwide organisations conducted by

the conference Board for A.T. Kearney, Inc in 1999 shows that linking formal

performance management systems to strategy can deliver better financial performance

(Kaplan and Norton 2001d).

30% had

same stock

performance

as

competitors

18% had

performance

below

competitors

52% had

stock

performance

above their

competitors

123

Diagram 2: Stock performances for companies that have a formal system in place to link strategy with

their performance measurement systems – produced by the researcher based on survey results

presented by Kaplan and Norton (Kaplan and Norton 2001d)

A survey conducted by Cranfield University in 2003 found that 46% of organisations

use a formal process of performance measurement. Of these organisations, 25% use

some form of total quality management (TQM) as their principle performance

management system, whereas 75% use a management system based on the Balanced

Scorecard (Kaplan and Norton 2001d).

The Balanced Scorecard was initially developed in 1992 for measuring performance

from four different perspectives as a result of multi-organisational action learning

community research. Over the years, this framework is now part of Closed-Loop

Management Systems to ensure the successful execution of an organisation’s strategy

(Kaplan and Norton 2008a; Kaplan and Norton 2008c). Kaplan suggests the scorecard

can cascade strategy throughout the organisation for successful Balanced Scorecard

adaptors (Kaplan 2001a; Kaplan and Norton 2001b; Kaplan and Norton 2001c;

Kaplan and Norton 2001d). See Diagram 3.

Introduction of

Balanced

Scorecard (1992)

Measure

performance

from four

perspectives:

financial

measures,

customers,

internal

processes,

learning and

growth. (Kaplan

and Norton,

1992)

Cause-and-effect

Balanced

Scorecard(1996)

Measure and

outcomes should

be linked

together as

“cause-and-

effect”

relationship.

(Kaplan and

Norton 1996b,

P20)

Strategy map

( 2004)

Strategy map

aligns intangible

assets to

company strategy.

(Kaplan and

Norton, 2004)

Effectively

translate

strategy into

objectives and

measures by

using theme-

based strategy

maps and

Balanced

Scorecard.

(Kaplan and

Norton 2008a)

Closed-Loop

Management

Systems (2008)

Diagram 3: Development of the Balanced Scorecard (Designed based on data collected from various

publications by Kaplan and Norton)

The major supporters of Balanced Scorecard implementation in health care are listed

in Table 2.

Year Scholar Main Proposition

1995 Baker and PinkFirst to discuss the applicability of Balanced Scorecard in

hospitals (Baker and Pink 1995).

1998 Chow et al.Balanced Scorecard can be used by healthcare organisations

to meet current challenges (Chow et al. 1998).

2002 Fitzpatrick "Let's bring balance to health care" (Fitzpatrick 2002, P35)

2002 Inamdar and KaplanBalanced Scorecard could be successfully applied in the

healthcare sector (Inamdar and Kaplan 2002).

2006 Schmidt et al .Explain how a mental health trust delivers excellent

performance using Balanced Scorecard (Schmidt et al. 2006),

2006 Kenton LauraUse Balanced Scorecard to delivery health care at reduced

cost without loss of quality(Kenton Laura 2006).

Table 2: Scholars supporting Balance Scorecard application in health care context

A number of notable contributors regard the Balanced Scorecard to be relevant to

health care, but “modification to reflect industry and organisational realities is

necessary” (Zelman, Pink et al. 2003). Radnor and Lovell warn that while a full

Balanced Scorecard system could be used to “enhance transparency, clarity, and

accountability for public/patients,” poor implementation of the Balanced Scorecard

without considering important specific factors can result in potential letdown (Radnor

and Lovell 2003b, P107). In research carried out by Patel et al, it was discovered that

although the Balanced Scorecard is a useful strategic tool that “links various

performance indicators to performance management processes to the organisations,”

its success is determined by the relevance of indicators (Patel, Chaussalet et al. 2008,

P913).

Neely and Bourne state in their publication that 70% of Balanced Scorecard

implementations fail due to poor adaptation and resistance in implementation (Neely

and Bourne 2000). Although this 70% failure rate refers to Balanced Scorecard

implementation across all industries, not only within health care, organisations which

plan to implement Balanced Scorecards should foresee the hardships. A recent study

by Gurd and Gao identified the current application of the Balanced Scorecard is more

focused towards the financial measures, not the health outcomes (Gurd and Gao

2008).

One of the greatest problems facing managers today is how to implement strategy.

Recent developments suggest that the Balanced Scorecard “provides a framework to

describe and communicate strategy in a consistent and insightful way.” (Kaplan and

Norton 2001d, P76) The Balanced Scorecard “is a multi-dimensional framework that

utilises measurement as a means of describing an organisation’s strategy.” (Radnor

and Lovell 2003, P99)

The development of the Balanced Scorecard is now at a stage to “drive performance

improvements” by following the stages of the Closed-loop Management systems

(Kaplan and Norton 2008c, P84). Diagram 4 illustrates that Closed-Loop

Management Systems include the following six stages:

Diagram 4: Closed-Loop Management Systems by Kaplan and Norton (Kaplan and Norton 2008a,

P65)

This suggests that senior managers will benefit by implementing this model as

periodically monitoring the performance and progress of the current strategy allows

some of the assumptions inherent in the strategy to be challenged. In the event where

the strategy is not delivering the desired results as forecasted, then senior managers

should question the validity of the strategy (Bourne, Mills et al. 2002). The rationale

behind this model is to guide senior managers in methodically covering all six stages

during the strategy development, execution stage. A strategy is developed based on a

set of assumptions. The Closed-Loop Management System offers a platform for

senior managers to validate the assumptions and the strategy.

The old adage “you get what you inspect, not what you expect” is valid in describing

the importance of performance measurement and strategy. As discussed earlier,

performance measurements can only be used to deliver the strategy if they are aligned

with strategy (Bourne, Mills et al. 2002).

As stated by Kaplan, an effective strategy cannot be executed without the support of

operational excellence and a governance process. On the other hand, improvement

initiatives, performance measures, and key performance indicators may improve

quality and reduce process lead times. Organisations cannot achieve sustainable

competitive advantages without a strategy.

Research Methodology

This research deploys a single-case (embedded) study approach in order to gather rich

data. A case study is defined as a study “involving a detailed description of the setting

or individuals, followed by analysis of the data for the themes or issues” (Maylor and

Blackmon 2005, P191). By using a case study, the researcher is able to review the

changes in performance results and their correlation with performance measurement

systems, which is not possible to define by using either quantitative or qualitative

research alone (Maylor and Blackmon 2005). There are a few pitfalls of the case

study method “when compared to quantitative research methodologies, namely

reliability and external validity” (Gay and Bamford 2007, P260). However, it remains

as one of the most popular research methods. Some of the important concepts

including Lean production have been developed by using a case study approach

(Voss, Tsikriktsis et al. 2002).

“The fewer the case studies, the greater the opportunity for in-depth observation.”

(Voss, Tsikriktsis et al. 2002, P201). Some notable examples of single-case studies

are the JIT case study by Karlsson and Ahlstrorn in 1995, and Japanese

manufacturing practices in the USA by Schonberger in 1982, etc. (Voss, Tsikriktsis et

al. 2002). In certain circumstances single-case study can be the preferred choice.

These include representatives of a typical case, unique and rare cases, or where aim of

research is to critically test of an existing theory (Yin 2009).

The case study site selected is X CHS – an NHS CHS organisation in England. X

CHS employs approximately 2,000 clinical and non-clinical staff, and is a PCT

provider of services. There are a number of reasons why X CHS is selected for this

case study: i) X CHS delivers 49 services to children and adults including a district

nursing service, practice nurse support, a children’s community specialists’ service

team, a health visiting service, speech and language therapy services, a sexual health

promotion team, and salaried dental services, etc, across some 100 sites (X CHS

Board 2009); ii) Its catchment area covers X city and surrounding rural areas

representing approximately 500,000 people: it principally serves communities in

deprived industrial areas. A significant proportion of its catchment population belongs

to disadvantaged ethnic minority groups. Its main funding source is from the

Government via the Dept of Health (Bamford 2009); ii) The transformation of

relationship between X CHS and the PCT commissioner to a contractual relationship

has provided X CHS with a number of opportunities in terms of empowerment – a

focus on delivering quality service, flexibility, and brand. Although the above is

perceived as an incentive to develop services in a far more responsive manner, it’s

necessary to measure whether senior management have the necessary business skills

to meet the challenge of contractual relationships with PCT commissioners; iii) The

primary researcher is employed by X CHS, therefore has full access to key personnel

across the organisation as well as required data. This increases the quality of data

collected during the research.

Both qualitative and quantitative research methods were identified to have a

multidimensional view to understand the above four points. The methods include

archival records, interviews, observations and surveys.

Findings

As Table 3 illustrates, the qualitative research findings cover a total of seventeen

issues relating to strategy deployment. This is not intended to present a full list of all

issues related to strategy deployment, however, all key topics are included to the best

knowledge of the researcher. The aim of this is to obtain an understanding of the

effectiveness of the current strategy deployment process within X CHS. Multiple

methods including comprehensive one-to-one interviews, participatory observations

and a detailed study of archival records were used to appraise the current application

and practice of X CHS in the identified seventeen areas.

No. Issues Key Qualitative findings

1Attitudes to mission,

vision and value X CHS has vision and value statement, however, lacks a mission statement.

2Attitudes to strategic

analysis

Models for external environment analysis such as PESTEL are not widely used. SWOT

analysis is used in corporate strategy but not functional strategies.

3Outputs of strategy

formulation

X CHS did not address potential threats that can be imposed by competitors. Service

categorisation could have been conducted.

4Approach to strategy

map.

The X CHS strategic plan outlined appropriate short-term, medium term, and long term

strategic objectives.

5Attitudes to strategic

objectives and themes.

Balanced Scorecard could be used to cascade high level strategies into measures and

targets from corporate level to business units and individuals.

6 Use of initiatives. Short term improvement initiatives are defined after gap analysis.

7

Attitudes to disseminate

strategy to Business

Units.

8

Attitudes to disseminate

strategy to Supporting

Units.

9Attitudes to disseminate

strategy to Employees.

Toolkit such as Balanced Scorecard could be implemented to cascade strategy to

individual employees and among senior managers.

10

Attitudes to align

improvement initiative

and strategic objectives.

There is no strong correlation between some improvement initiatives and long term

strategic objectives.

11Use of capacity

planning. There is skill shortage in conducting capacity planning.

12

Approach to overcome

resistance for strategy

execution.

X CHS states risk and mitigation plan in corporate strategy but not in other strategies.

13Attitudes to strategy

review meetings.

In the strategy review meetings, the main focus is to review performance and

discussion implications, while less time is allocated to develop actions plans.

14Attitudes to operational

review meetings.

In the operational review meetings, a lot of time is allocated to distribute and

comprehend the data for the meeting itself.

15Attitudes to cost and

benefit analysis.

Evidence suggests that economic strategy analysis is not part of strategy

deployment process within X CHS.

16Approach to strategy

correlation analysis.

The level of statistical information available to management and staff is not optimised.

The overall X CHS performance and progress to date could have been presented by

using Balanced Scorecard.

17Awareness of strategy

adaptation.

There is no formal strategy testing and adapting governance and process in place to

ensure changes in both internal and external environment are reflected in the

strategy.

Although a total of 8 communication methods are deployed for downstream and

upstream communication, X CHS has no communication strategy.

Table 3: Summary of Key Qualitative Research Findings

Table 4 summarises the key quantitative research findings with the aim to assess

whether X CHS senior managers have the required competencies for successful

strategy execution and can identify any possible knowledge gaps. This is the first

study to investigate strategy deployment within an NHS CHS organisation. It is also

the first occasion to the researcher’s knowledge where strategy planning knowledge

assessment was conducted in a CHS organisation.

No. Issues Key quantitative findings

1Attitudes to strategic

analysis

91% of respondents are confident with their expertise level of

conducting strategic analysis.

2Outputs of strategy

formulation

82% of respondents are confident with developed strategy based on

mission, vision, values and strategic analysis.

3Approach to strategy

map.82% of respondents are not proficient to draw a strategy map.

4Attitudes to strategic

objectives and themes.

91% of respondents are able to select measures and targets to delivery

the strategy.

5 Use of initiatives. All respondents are confident to define strategic objectives and themes.

6

Attitudes to disseminate

strategy to Business

Units.

7

Attitudes to disseminate

strategy to Supporting

Units.

8Attitudes to disseminate

strategy to Employees.

49% of staff agree / strongly agree to “my trust communicates clearly

with staff about what it is trying to achieve”.

9

Attitudes to align

improvement initiative

and strategic objectives.

All respondents either strongly agree or tend to agree that they are

able to identify the need to improve certain processes to deliver the

strategy.

10Use of capacity

planning.

91% of respondents either strongly agree or tend to agree that they are

able to plan resource capacity to delivery the strategy.

11

Approach to overcome

resistance for strategy

execution

91% of respondents either strongly agree or tend to agree that they

are able to overcome resistance to execution of the strategy.

12Attitudes to strategy

review meetings.

73% of respondents either disagree or are neutral towards effectiveness

of strategy review meetings.

13Attitudes to operational

review meetings.

64% of respondents either disagree or are neutral towards

effectiveness of operational review meetings.

14Attitudes to cost and

benefit analysis.

Only 36% of respondents either strongly agree or tend to agree that

they are able to conduct cost and benefit analysis.

15Approach to strategy

correlation analysis.

Only 9% of respondents either strongly agree or tend to agree that

they are able to conduct strategy correlation analysis.

16Awareness of strategy

adaptation.

82% of respondents either strongly agree or tend to agree that they are

able to amend the strategy should the current strategy no longer serve

its purpose.

The corporate strategy awareness level among senior managers is

91%, while the awareness level of functional strategy is much lower.

Table 4: Summary of key Quantitative Research Findings

Discussion

Based on the literature review, and consultation with line managers of the host

company, we developed an NHS Community Health Services Strategy Deployment

Conceptual Model based on a Closed-Loop Management System. The Conceptual

Model is developed to enable the researcher to verify its applicability and X CHS’s

organisational readiness in adapting such a model. The Conceptual Model includes

the following six stages. See Diagram 5.

Sta

ge 2

.

Tra

nsla

te s

trate

gy

Stage 1.

Develop strategy

Stage 3.

Align

organisational

units &

employees

Stage 4.

Plan operatio

ns to

execute strategy

Stage 5.

Monitor and

learn

Sta

ge 6

. T

est a

nd

ad

ap

t

Diagram 5: NHS Community Health Services Strategy Deployment Conceptual Model – developed by

the researcher based on literature review and consultation with host company staff (adapted from

Kaplan and Norton 2008a)

Stage 1 - Develop Strategy

Developing strategy in most organisations starts with an affirmation of the mission –

why the organisation exists, vision – its aspiration for future results, and values – the

internal beliefs that guide its actions (Kaplan and Norton 2008a). However,

organisations often mix their statement of values or mission statement with their

strategy statement (Collis and Rukstad 2008). The mission statement articulates the

fundamental motivation for an organisation’s existence while the vision refers to its

aspiration for future results and the value represents the internal beliefs that guide its

actions. The mission statement spells out the underlying motivation for being in

business in the first place – the contribution to society that the firm aspires to make

(Collis and Rukstad 2008).

Stage 2 - Translate Strategy

Within this stage, practitioners are reminded that strategy is an empty concept unless

it is translated into a set of objectives and measures. The measures are used for

measuring the company’s performance and progress. It’s important to visualise this

progress by specifying when, how much and what (Thompson, Strickland et al. 2008).

Stage 3 - Align Organisational Units and Employees

One of the reasons that most companies fail to implement their strategy is due to

insufficient involvement of people who actually implement the strategy (Sterling

2003). Scholars Bower and Gilbert reinforce this message as they note that as

corporate staff begin to deploy initiatives to deliver strategic objectives midlevel

managers might disparage those initiatives (Bower and Gilbert 2007). Typically, the

strategy formulation is a top down process where higher level strategies are used as

guidance for defining lower level strategies (Thompson, Strickland et al. 2008). Most

of the CHS organisations include diversified business units; therefore, the strategy

development involves corporate strategy, business strategy, functional strategy and

operating strategy.

Stage 4 - Plan Operations to Execute Strategy

A robust execution process can turn a doubtful strategy choice into a successful one

(Andrews 1980). Therefore, it is important to prepare programmes, policies, and plans

to implement the strategy and allocate resources to develop the supportive

organisational structures, decision processes, information and control systems, and

hiring and training systems to deliver the strategy.

At this stage, senior managers prioritise strategic goals with consideration of

alignment between strategic improvement initiatives – short, medium and long term

projects – to strategic objectives (Watkins 2009). Spending on selected strategic

initiatives is also calculated here to ensure selective strategy implementation (Kaplan

and Norton 2008b). Strategy synthesises actions and intentions to shape a company

and influence its performance (Mintzberg, Ahlstrand et al. 2009). Implementing a new

strategy requires a number of methods for dealing with resistance to change including

education, participation, facilitation, negotiation, manipulation, and explicit and

implicit inclination (Kotter and Schlesinger 2008).

Stage 5 - Monitor and Learn

Constant monitoring on effectiveness of strategy, external and internal environments,

and progress of strategy implementation is required to ensure successful execution

(Sterling 2003). Senior managers advance the strategic plan by keeping

implementation on track and adjusting quickly to challenges and obstacles. One way

to achieve this is to conduct a structured set of meetings including operational review

meetings to assess short-term performance and respond to problems that have arisen

recently and need immediate attention and strategy review meetings to ensure that the

successful execution of strategy by effectively monitoring and managing strategic

initiatives and Key Performance Indicators.

Stage 6 - Test and Adapt

Strategy is formulated based on critical strategic analysis of the current situation,

problems and the forces that possibly contribute to the current situation. No matter

how robust the strategy formulation process, something unexpected will happen

during the execution of strategy. Therefore, it is important to appraise how well the

organisation performs, and update the strategy as new realities emerge (Bower and

Gilbert 2007; Kotter and Schlesinger 2008). Industry changes present an opportunity

to claim if this can be captured timely (Porter 2008).

An organisation can only attain its success by aligning the value proposition, the

profit proposition and the people proposition (Kim and Mauborgne 2009). Economic

evaluation of current strategy helps organisations to understand whether the current

strategy has achieved the strategic alignment. Statistical analysis in combination with

economic evaluation can facilitate senior managers to link strategic initiative to return

on investment (Kaplan and Norton 2008b). Where it is applicable, this should trigger

senior managers to amend or change the company’s strategy by returning to the initial

stage of strategy development. Systems for upward communication should be

established to enable employee participation in the strategy formulation process. In

many situations, upward communication is inadequate as it’s considered less value

adding (Mintzberg, Quinn et al. 1998).

The CHS Strategy Deployment Conceptual Model presents a good guidance of the

strategy deployment process. Strategy deployment should not be a ceremonial process

where senior managers write the strategy, board approves the strategy, middle

managers receive a copy of the strategy, line managers hear rumours about it and staff

carry on with their duties obliviously (Oughton 2009). By implementing a model such

as the CHS strategy Deployment Conceptual Model, senior managers would

periodically monitor the performance and progress of current strategy, allowing some

of the assumptions inherent in the strategy to be challenged (Bourne, Mills et al.

2002).

Conclusion

From the perspective of academic research, by developing the CHS Strategy

Deployment Conceptual Model to link the Balanced Scorecard to strategy for the

health care industry, this study will contribute to the body of knowledge for Balanced

Scorecard implementation as well as Closed-Loop Management Systems adaptation

within health care industry.

Even though we deliberately chose to keep the descriptions simple to avoid any

misunderstanding or difficulties in interpreting and completing the questionnaire,

there is feedback that some senior managers found difficulties in linking some terms

to the strategic activities they perform, e.g. strategy map, cost and benefit analysis,

etc. It is important for future research that the researcher should develop a more

comprehensive definition for certain vocabularies which are widely used in the

industry but not within NHS organisations.

There are a number of potential areas of further research in order to enrich this study

further: Pilot CHS Strategy Deployment Conceptual Model in other CHS

organisations as well as other NHS organisations; Conduct Senior Management

Strategy Deployment Knowledge Assessment in other CHS organisations as well as

other NHS organisations.

The significance of the research is also supported by the enthusiasm of X CHS

management. This research was considered valuable as it will bring breakthrough

improvement to not only X CHS but also have an impact on other CHS and NHS

organisations.

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